Chicago Housing Market Slows

IT’S BEEN QUITE A YEAR FOR THE CHICAGO HOUSING MARKET, WITH SALES OF EXISTING AND NEW HOMES BREAKING ALL RECORDS. BUT FOURTH QUARTER SALES HAVE SLOWED, A SIGN THAT THE HOUSING MARKET IS SOFTENING.

THIS YEAR, SALES OF EXISTING HOMES NATIONWIDE ARE EXPECTED TO REACH NEARLY FIVE AND A HALF MILLION, WITH AN ADDITIONAL MILLION NEW HOME SALES. BUT THE SECTOR OF RISING INTEREST RATES AND A POSSIBLE WAR IN IRAQ MEAN WE PROBABLY WON’T SEE SALES THIS HIGH IN 2003.

SIGNS, SIGNS. EVERYWHERE THERE ARE SIGNS. IF YOU’RE TRYING TO SELL YOUR HOME, YOU MAY HAVE NOTICED THE FOR SALE SIGNS IN YOUR NEIGHBORHOOD ARE HANGING AROUND A LOT LONGER.

“A LOT OF PEOPLE ARE ASKING FOR OFFERS, JUST TO GET ONE,”; SAYS HOME BUYER CHANDRA PORTMAN.

MARKET TIMES HAVE DOUBLED OR IN SOME CASES TRIPLED IN THE PAST SIX MONTHS. IT’S PART OF A METRO-AREA SOFTENING OF THE MARKETING FOR HOMES PRICED ABOVE $350,000.

“WITHIN THE GREATER SUBURBAN CHICAGO AREA WE’RE FINDING THAT HOUSES OVER A MILLION DOLLARS THE MARKET FOR THOSE HOUSES HAS SLOWED VERY SIGNIFICANTLY OVER THE COURSE OF THE LAST FOUR OR FIVE MONTHS,” NOTES STEVEN GOOD, PRESIDENT-ELECT, CHICAGO ASSOCIATION OF REALTORS.

THE HOUSING MARKET’S PROBLEMS INCLUDE THE CURRENT ECONOMIC MALAISE, DECLINING STOCK MARKET AND WEAK JOB MARKET AS WELL AS THE PROSPECT OF WAR WITH IRAQ. THE LOWEST INTEREST RATES IN 40 YEARS ARE SUPPORTING THE FIRST-TIME BUYER MARKET, BUT THAT SEGMENT OF THE MARKET COULD COLLAPSE IF RATES BEGIN TO RISE.

“IT’S A LITTLE SLOW OUT THERE, FROM A BROKER’S PERSPECTIVE, BUT IT’S A GOOD TIME TO BUY SOMETHING, IF YOU’VE GOT THE MONEY,” ADDS PORTMAN.

“CAN I ANSWER ANY QUESTIONS FOR YOU?” ASKS DARLENE LEONI. “BUYERS SEEM TO BE MORE CONTEMPLATIVE. THEY’RE WEIGHING THEIR DECISIONS MORE. THEY’RE LOOKING AT MORE AND OF COURSE THERE’S A LOT MORE PRODUCT TO BE LOOKING AT RIGHT NOW.”

SO IF YOU WANT TO SELL OVER THE NEXT FEW MONTHS, YOU’LL HAVE TO DO EVERYTHING RIGHT.

“ANYTHING THEY CAN DO TO MAKE THEIR PROPERTY SHOW THE BEST, BE THE BEST, YOU HAVE TO DO AND THAT’S NOT NECESSARILY ALWAYS ABOUT PRICE, ALTHOUGH THAT’S ONE OF THE MOST IMPORTANT FACTORS,” SUGGESTS DRUKER.

OR RISK ENDING UP WITH LESS CASH — OR NO CASH — IN YOUR POCKET.

“THE PEOPLE WHO AREN’T GOING TO DO WELL ARE THE ONES THAT BOUGHT IN THE LAST COUPLE OF YEARS. IT’S GOING TO BE HARDER FOR THEM TO GET OUT OF THEIR PROPERTY,” DRUKER ADDS.

A SOFT HOUSING MARKET ISN’T HENNY PENNY THE SKY IS FALLING, BUT IS IS A BIG CHANGE FROM THE TONE OF THE MARKET OVER THE PAST SEVEN YEARS. AGAIN, TO COMPETE, SELLERS WILL HAVE TO GET THEIR HOME IN PERFECT CONDITION AND BE WILLING TO PRICE AND MARKET IT AGGRESSIVELY.

ANCHOR: ILYCE, HOMES WERE SELLING IN A DAY NOT THAT LONG AGO, AND FOLKS WERE FIELDING MULTIPLE OFFERS. HOW LONG SHOULD SELLERS BE PREPARED TO WAIT FOR AN OFFER NOW?

ILYCE: THE FIRST-TIME BUYER MARKET IS STILL STRONG, BUT THE AVERAGE NUMBER OF DAYS ON THE MARKET HAS RISEN TO ABOUT 90, OR THREE MONTHS. AND THAT’S ABOUT DOUBLE OR EVEN TRIPLE WHERE IT WAS SIX MONTHS AGO.